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TMI Blog2016 (4) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... e, fittings which cannot be considered as ‘house property’. AO’s opinion that since TDS made u/s. 194-I, incomes are to be assessed under head ‘income from house property’ can not be accepted. Moreover, even if assessee has let out property but, when the Memorandum of Association permits the business of letting out of properties as such, the income cannot be brought to tax as ‘income from house property’ as held in the above said case of Chennai Properties & Investments Ltd., Vs. CIT [2015 (5) TMI 46 - SUPREME COURT]. Therefore, both on facts of the case and also on law, as established by the Hon'ble Supreme Court in the above said case, receipts of assessee cannot be brought to tax under the head ‘house property’. The same is to be assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been accepted up to AY. 2006-07 as income from business . However, in the impugned year Assessing Officer (AO) asked assessee to show cause why the income should not be treated as income from house property as against profits and gains of business or profession . Assessee submitted that it is carrying the business of hospitality since inception i.e., 19-04-2002 and its main object as per Clause-I of Memorandum of Association is that of carrying on of business of hotels, resorts, boarding and lodging, houses, guest houses, holiday homes, Inns, resorts, caf , bar, resorts, health clubs etc . It also submitted that it is running a lodging and providing food to guests. It was submitted that in earlier years, assessee s incomes were accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis. The additional grounds are legal in nature mainly pertaining to the disallowance of expenditure. Accordingly, they are allowed. 5. After considering the rival contentions, we are of the opinion that there is dispute with reference to certain facts; i) Assessee owns the property on which it is running the hospitality business; ii) Assessee has not let out property per se but has entered into agreement for providing accommodation to the software engineers of various companies in its property; iii) The agreement indicate that the charges are payable on occupancy basis on per day basis without any food, except providing coffee and tea and light snacks; iv) The receipts which are received are for occupancy only of the seven rooms assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee therefore, rightly disclosed the income under the head income from business. It cannot be treated as income from the house property . Accordingly, instant appeal is allowed and order of the High Court is set aside. In the above said case, assessee was acquiring the properties and let out those properties as well as making advance on security of lands and buildings and other properties. In assessee s case, assessee has not let out any property but has allowed the occupancy of the said properties on a rental basis charged on day to day basis. Assessee has entered into agreement with various companies only for providing occupancy, not for lease of property. As seen from the agreements placed on record, assessee has entered int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition. But machinery lease can not be considered under income from House property . That indicates that just because TDS was made u/s. 194-I, it cannot be treated as house property income as the rent definition includes lease of equipment, lease of furniture, fittings which cannot be considered as house property . AO s opinion that since TDS made u/s. 194-I, incomes are to be assessed under head income from house property can not be accepted. Moreover, even if assessee has let out property but, when the Memorandum of Association permits the business of letting out of properties as such, the income cannot be brought to tax as income from house property as held in the above said case of Chennai Properties Investments Ltd., Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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